Energy services firm Petrofac faces a major blow after the UK Court of Appeal overturned its restructuring plan, ruling that it unfairly allocated too much value to new investors and left existing shareholders effectively wiped out.
The appeal was lodged by Samsung and Saipem, who argued they would be disadvantaged under the plan. The High Court had sanctioned a twin restructuring intended to deleverage debt, inject $350million of fresh capital and reallocate equity.
The Court of Appeal struck down that decision, finding that Petrofac had failed to show the returns promised to new-money investors were fairly priced or benchmarked in the market. It held that more than two-thirds of the value preserved by the restructuring would accrue to new investment, while other creditors and shareholders were left with minimal recovery.
A Petrofac spokesperson stated: “The group is focused on completing the restructuring in the shortest possible time and by the end of November 2025. It continues to advance more than one route to implement the restructuring, each supporting the group’s operational capability and ongoing delivery. These routes include those which may result in no residual value being retained by existing shareholders. The implementation route will be determined on the basis of input from funding parties and key creditors.”
In an earlier corporate update, CEO Tareq Kawash said: “The agreement of stakeholders to extend the Lock-Up demonstrates their support for the work underway to address the narrow grounds on which the Court of Appeal upheld the challenge to our Restructuring Plan”, adding that “Petrofac’s operational capability remains intact, and the business continues to deliver for its clients.”